FWA probes union boss super fees

Jim Metcher is being investigated by Fair Work Australia over accusations of financial misuse. Photo: Getty Images

David Ramli

Fair Work Australia is investigating top union official Jim Metcher over allegations he kept almost $500,000 in board fees from the Australia Post Superannuation Scheme that was meant to be used for members.

The accusations of financial misuse, which have been denied, are the latest in a series of issues to hit the Communications, Electrical, and Plumbing Union (CEPU), which represents more than 130,000 workers from Australia’s biggest companies including Telstra, Australia Post and the national broadband network.

It is alleged Mr Metcher, the CEPU NSW branch secretary, was paid up to $60,000 per year for being a board member at the Australia Post Superannuation Scheme.

But in November 2004, the CEPU passed a resolution stating that all payments made to union officials other than their salaries had to be “paid into the relevant branch, divisional office or national office operating account, and is to be considered revenue of the CEPU”. This means up to $480,000 over eight years that should have been paid into union coffers has allegedly been kept by Mr Metcher.

According to a letter from Fair Work Commission delegate Ailsa Carruthers, seen by The Australian Financial Review, the inquiry is currently known as “FR2012/491” and has been under way since February 11, 2013.

“I am considering allegations . . . that Jim Metcher, secretary of the NSW Postal and Telecommunications Branch of the Communications Division, has failed to pay board fees . . . arising from his role as a director of PostSuper,” she said.

Metcher denies any wrongdoing

Mr Metcher would not comment on the director’s fees but denied any wrongdoing and said the allegations came from his enemies within the union at national level.

“I reject outright that I have breached any rules or sections of the Fair Work Act and I have provided a response to [the Fair Work Commission],” he said. “I am keen along with others to see the results of the Fair Work inquiry . . . and will be very surprised indeed if Fair Work find any inappropriate behaviour on my part.

“I don’t want to make any comments because there’s an inquiry going on . . . and these matters could subsequently be part of court proceedings.”

Mr Metcher said the latest proceedings were payback for a separate issue raised in the media and currently before the Fair Work Commission.

“I have made submissions of my own in regards to . . . a separate inquiry, which is a lot more serious and larger in terms of our organisation at a national level,” he said.

Internal minutes seen by The Financial Review state that, in 2011, Mr Metcher said that some of the funds were returned to his NSW branch while the rest was subject to a confidential agreement with the ACTU, which appointed him to the superannuation fund’s board.

Union sources indicated the issue is set to be taken to the Federal Court in Victoria within weeks.

The claims are similar to those faced by former Electrical Trades Union NSW boss Bernie Riordan in 2012. He was accused in the Federal Court of receiving $1.8 million in director’s fees from industry boards that should have been paid back to his union.

Federal body also pursuing allegations

The case was withdrawn on February 23, 2012 – one day before Mr Riordan was appointed by the Gillard government to the role of commissioner at Fair Work Australia.

CEPU communications divisional president Len Cooper said he was aware of the issue and that Mr Metcher had not paid the union any of his board fees. “We are concerned about this because, as a matter of principle, we think board fees to a union official serving the union should be paid as a matter of principle into the union,” he said.“If there’s any breach of that then that’s a matter we believe has to be pursued.

“We’ve only had access to the [financial] books since we took over the national leadership of the union, which prompted us to really use that position and try to clean the place up so that’s what we’re doing.”

Separate internal CEPU documents obtained by The Australian Financial Review show the union’s federal body is also pursuing allegations of badly managed accounts and “a number of payments which could not be explained” at its Tasmanian branch. According to a 2011 check of the CEPU Communications Tasmanian branch’s financial accounts by Melbourne-based accounting firm MSI Ragg Weir, there was a lack of control over the income, payments and payroll systems.

The report also said the branch had “a relatively high employee benefits expense”. Of the $220,000 raised by annual member fees, $199,517 was allegedly spent on salaries, leave and other benefits.

At the time the union’s staff included one part-time staffer, Robyn Miller, and two full-time employees, Peter Miller and Lauren Miller. The review also noted $32,601 in “unidentified errors” along with an unexplainable increase in printer cartridge purchases from $2928 in 2010 to $11,895 in 2011.

But Mr Miller said the issues related to human error and had all been rectified. He said Lauren Miller had taken the job at short notice with only two-weeks’ training.

“I’ve met with our auditors [WHK Australia] twice since and they did the adjustments,” he said. “We put in a plan of action . . . but then we just said ‘why don’t we just amalgamate with the electricals [union] and make it one CEPU’ and it’s what we’ve done.”

Metcher met Eddie Obeid, according to diaries

The printer cartridges had been a “bloody scam” by a supplier and money had been re-credited.

The allegations are the latest to hit the CEPU amidst a damaging internal rift between its left and right factions.

In September 2012 Fair Work Australia began inquiring into allegations CEPU national president Dan Dwyer misused union funds on excessive travel expenses and to buy a family car – a move Mr Dwyer said was part of a personal and political campaign against him by his Right faction rivals who had lost at earlier elections.

Mr Metcher is a senior member of Labor’s NSW Right faction and has been thanked by several of its best-known MPs during their inaugural speeches.

According to former Labor state minister Eddie Obeid’s 2007 diary, which was tendered in March by the Independent Commission Against Corruption, Mr Metcher met Mr Obeid three times between March and April.

Of these meetings one recorded then state minister Joe Tripodi as an attendee while another was due to include Mark Arbib, a future federal minister.

Despite the accusations, Mr Dwyer said there was a range of even bigger problems facing the union. “Those issues going to the Federal Court are only part of the issues I’m concerned about,” he said. “There are a number of other probably more significant problems that need to be addressed.”